This morning's trading has marked a bad day for the market so far. The Nasdaq is trading down 0.4%; the S&P 500 is down 0.8%; and the Dow is trading down 0.8%.
The Real Estate Operations sector (IYR) is currently lagging behind the overall market, down 0.6%, and its current biggest movers are:
|Company||Market Cap||Percentage Change|
|Ashford Hospitality Trust, Inc. (NYSE:AHT)||$518.6 million||+3.7%|
|Government Properties Income Trust (NYSE:GOV)||$1.03 billion||-3.7%|
|Howard Hughes Corp (NYSE:HHC)||$2.33 billion||+2.3%|
|Eastgroup Properties Inc (NYSE:EGP)||$1.56 billion||-2%|
|PS Business Parks Inc (NYSE:PSB)||$1.62 billion||-2%|
|Sabra Health Care REIT Inc (Nasdaq:SBRA)||$677.3 million||+1.9%|
|HCP (NYSE:HCP)||$20.16 billion||-1.8%|
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Increasing 3.7%, Ashford Hospitality Trust (NYSE:AHT) is trading at $7.89 per share. This morning, the company is trading a volume of 944,958 shares. A stock's volume conveys how excited investors are about it. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The dividend yield is calculated by dividing a company's dividends per share by its stock price. AHT's dividend yield is 5.8%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Due Diligence On Dividends
Government Properties (NYSE:GOV) has decreased to $21.16 per share, a 3.7% fall. The company's volume is currently 459,900 shares for the day, in keeping with its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. A price/sales ratio is derived by dividing stock market price by company sales. GOV's P/S ratio of 5.97 is on the high side. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Howard (NYSE:HHC) is at $62.75 per share after an increase of 2.3%. The company's volume for the day so far is 35,335 shares. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt ratio shows the proportion of assets that a company is financing through debt. HHC has a low debt ratio of 34.7%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. However, one thing to note with this ratio: it isn't a pure measure of a company's debt (or indebtedness), as it also includes operational liabilities, such as accounts payable and taxes payable.
Eastgroup Properties (NYSE:EGP) is trading at $52.24 per share, down 2%. The company's volume is currently 65,936 shares for the day, 0.3 times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Valuation ratios include the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). EGP has a PEG ratio of 11.42. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Falling 2%, PS Business Parks (NYSE:PSB) is currently at a share price of $65.59. So far today, 56,429 shares have changed hands. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. PSB has a capitalization ratio of 34%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
After an increase of 1.9%, Sabra Health Care REIT (Nasdaq:SBRA) has reached a current price of $18.62. The company's volume for the day so far is 245,059 shares, 0.7 times its average over the past three months. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. Valuation ratios like the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield are useful in determining how attractive a potential or existing investment is. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). SBRA has a P/E ratio of 36.6. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?
HCP (NYSE:HCP) is down 1.8% to reach $46.09 per share. The company is trading at a volume of 962,625 shares. This is a sign that there will be less trading activity than there was yesterday. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. The debt-equity (D/E) ratio is a leverage ratio. HCP's D/E ratio is 84%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
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